White Collar Crime: Italicized Words/Phrases Flashcards
Said to be “Crime in the upper, white-collar class, which is composed of respectable, or at least respected, business, and professional men.”
White-Collar Crime
These terms have become interchangeable with white-collar crime.
Economic Crime
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Financial Crime
An alternate definition proposed is: “These violations are those violations of law … that involve the use of a violator’s position of economic power, influence, or trust in the legitimate economic or political institutional order for the purpose of illegal gain, or to commit an illegal act for personal or organizational gain.”
White-Collar Crime
Pervasive reasons why organizations decline to refer cases to law enforcement:
Fear of bad publicity (38%, trending down 6% to date across 8 years of data)
Internal discipline is sufficient (46%, trending up 13% to date across 8 years of data)
Private Settlement (27%, trending up 6% to date across 8 years of data)
Too Costly (17%, trending up as high as/as low as 9%/2% respectively across 8 years of data)
Lack of Evidence (10%, trending up 2% to date across 8 years of data)
Civil Suit (6%, trending up 3% to date across 8 years of data)
Perpetrator disappeared (1%, trending consistently within 1% variance date across 8 years of data)
This kind of crime is that which is committed by businesses, particularly corporations, and the government.
Organizational Crime
This kind of crime involves legal offenses committed by individuals in the course of their occupation.
Occupational Crime
It’s been asserted that all organizations could be called inherently this in regards to crime.
Criminogenic (id est, prone to committing crime)
According to Clinard and Yeager, corporations that DO violate acceptable conduct and those that do not are distinguished by these, which are the degree to which a corporation has made the choice to be unethical, to disregard the interests of the consumer and the public, and to disobey the laws that regulate its specific industry.
Corporate Cultures and/or Ethical Climates
In terms of enforcement strategies and procedures, there are two main theories. Of those two, this is designed to achieve conformity to the law without having to detect, process, or penalize violators.
Compliance
In terms of enforcement strategies and procedures, there are two main theories. Of those two, this is a strategy to control crime and is designed to detect law violations, determine who is responsible, and penalize offenders to deter future violations.
Deterrence
This term is defined by Gary Green as “any act punishable by law which is committed through opportunity created in the course of an occupation which is legal”
Occupational Crime
Occupational Crime can be broken down into 4 categories, including:
Crimes for the benefit of an employing organization - known as this
Organizational Occupational Crime
Occupational Crime can be broken down into 4 categories, including:
Crimes by officials through exercise of their government-based authority, which is called this:
Government Authority Occupational Crime
Occupational Crime can be broken down into 4 categories, including:
Crimes by professionals in their capacity as professionals, known as this:
Professional Occupational Crime
Occupational Crime can be broken down into 4 categories, including:
The fourth kind is not organizational, government authority, professional, but this:
Crimes by Individuals as Individuals
Cressey’s final hypothesis included these points:
Trusted persons become trust violators when they:
** Conceive themselves as having a financial problem which is non-shareable
** Are aware this problem can be secretly resolved by violation of the position of financial trust
*** Are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of
themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property
Cressey’s hypothesis, over the years, has become better known as this
The Fraud Triangle
The Fraud Triangle is composed of three legs, the first of which is this:
A perceived non-shareable financial need
The Fraud Triangle is composed of three legs, the second of which is this:
Perceived Opportunity
The Fraud Triangle is composed of three legs, the third of which is this:
Rationalization
The non-shareable financial problem creates the motive for the crime to be committed, but the employee must also perceive that they have an opportunity to commit the crime without being caught. This is called:
Perceived Opportunity
In Cressey’s view, there were two components of the perceived opportunity to commit a trust violation. Those were:
General Information
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Trust
This is simply the knowledge that the employee’s position of trust could be violated. This knowledge could come from hearing of other embezzlements, from seeing dishonest behavior by other employees, or just from generally being aware of the fact that the employee is in a position where they could take advantage of their employers’ faith in them.
General Information
This refers to the abilities needed to commit the violation. These are usually the same abilities that the employee needs to have in order to obtain and keep their position in the first place. Cressey noted that most embezzlers adhere to their job routines (and their job skills) in order to perpetrate their crimes.
Technical Skill
Cressey pointed out that this is not an ex post facto (retroactive) means of justifying a theft that has already occurred. Significantly, this is a necessary component of the crime before it takes place; in fact, it is a part of the motivation for the crime.
Rationalization
These types of people in Cressey’s study were individuals who were in business for themselves and converted “deposits” that had been entrusted to them.
Perpetrators in this category tended to use one of two common excuses: (1) they were “borrowing” the money they converted or (2) the funds entrusted to them were really theirs - you cannot steal from yourself. (Borrowing was most frequently used)
Independent Businesspeople
Cressey defined these as individuals who converted their employer’s funds, or funds belonging to their employer’s clients, by taking relatively small amounts over a period of time.
Long-Term Violators
Cressey discussed these offenders as people who take the money and run.
Cressey found that the non-shareable problems for absconders usually resulted from physical isolation
Absconders
Albrecht Study listed 10 most highly ranked factors of motivating factors in committing their fraud from a list of personal characteristics which were:
- Living beyond their means
- An overwhelming desire for personal gain
- High personal debt
- A close association with customers
- Feeling pay was not commensurate with responsibility
- A wheeler-dealer (scheming) attitude
- Strong challenge to beat the system (id est, successfully evade the rules)
- Excessive gambling habits
- Undue family or peer pressure
- No recognition for job performance
Albrecht’s study’s findings were similar to what Cressey identified as non-shareable financial problems, including:
- Placing too much trust in key employees
- Lack of proper procedures for authorization of transactions
- Inadequate disclosures of personal investments and incomes
- No separation of authorization of transactions from the custody of related assets
- Lack of independent checks on performance
- Inadequate attention to details
- No separation of custody of assets from the accounting for those assets
- No separation of duties between accounting functions
- Lack of clear lines of authority and responsibility
- Department that is not frequently reviewed by internal auditors
Of the three primary categories of occupational fraud:
- A* is by far the most common @ 86%
- B* is second most common @ 43%
- C* is the least common @ 10%
- A* is Asset Misappropriation
- B* is Corruption Schemes
- C* is Financial Statement Fraud
Of the three primary categories of occupational fraud:
- A* is by far the most costly, with a median loss of $954,000
- B* is second most costly, with a median loss of $200,000
- C* is the least costly, with a median loss of $100,000
- A* is Financial Statement Fraud
- B* is Corruption Schemes
- C* is Asset Misappropriation
According to Crimes Of The Middle Class: Of the middle class, this single quality distinguishes them from others:
They have been convicted of a federal crime.
PSIR stands for
Presentence Investigation Report
Judgments against white-collar defendants often involve an assessment of personal suffering.
True/False
True.
The consideration is made because of a professional loss that would also occur, as opposed to a standard, street-level offender.
Contributing factors to the rising problems of economic crime. x5
The economy increasingly runs on credit, which often means rising personal debt. The offenders in the sample often showed serious discrepancies “between their resources and their commitments.
New information technologies mean that the opportunity for wrongdoing is growing, and many of the techniques are not widely comprehended by businesses or individuals.
Government programs distributing large amounts of money make an enticing target for embezzlement.
The importance of credentials in a professional society may influence individuals “to inflate the credentials, or to make them up when they do not exist”. This tendency involves everything from cheating on school entrance exams to falsifying credit applications.
Most broadly, the authors observe an overarching culture based on affluence and ever-higher levels of success. Media sources, and advertising in general, promise that no one has to settle for second best, prompting those who find themselves running behind to make an attempt to conceal the difference, crossing ethical and sometimes legal lines.
